A Slippery Slope to HC Emasculation

“If you don’t check what you caught, how do you know you’re using the right fishing tackle?” Otto Pretorius, Director Consulting: QBIT looks at how self-serving technology has led to HC losing the plot.

The HC Director is in a massive catch 22 position. In every organisation, it is the people that ultimately do the work and make the money, but compared to the Sales Director, the Financial Director…even the IT Director, the HC Director wields very little clout in the boardroom and in many of the operation decisions of the organisation. One of the key reasons is that “people” issues are often regarded as soft issues. It’s hard to quantify value and where it lies in human resources and it’s difficult to see cause-and-effect relationships in any but the simplest systems. But not impossible.

If HC Directors can demonstrate clear business imperatives for a specific strategy and have hard numbers to validate the choice of one gambit over another, they would be in a much stronger position. In larger organisations, new HC-specific IT technologies have started to address this need for feedback of results as an initiative, back into strategy-making, but many (if not most) organisations have gone off on the wrong tangent and allowed technology to become part of the problem. It’s time for a rethink by those who plan to spend millions (or have already!) on large scale organisational HC process projects.

The IT Manager often takes less interest in HC, preferring to oil the squeakiest wheels; the urgent demands of financial, transactional, operational and sales systems. HC Managers often take little interest in technology and what it could do for them if they applied a strategic view to it. What is overlooked is that this is often where a significant part of the cost – or investment if you must in people can be tracked. According to Pretorius “these costs could reach well into between 45 to 75 percent of the opperational cost in the organisation”. Can we really afford not to have information about this? Can we really afford not making quality decisions simply because HC has not got it right?

This has led to organisations where technology is mostly used by HC to automate or formalise processes, not as an information tool to help guide and validate strategic direction at board level. Most technology used today in HC is applied to process, and it’s often an unwieldy failure, because it helps create ‘process bloat’, where the automation of HC process becomes an end rather than a means of increasing efficiency. Have we not learnt that complex processes offer no competitive advantage unless these lead to better quality information for decisionmaking?

A completely different approach needs to be taken, where technology is used by HC to provide information feedback, to justify decisions made at the thought leadership level. If you look at a three-tier model, the top tier is strategy and thought leadership at board and senior management level. The second tier is the actual processes and technology enablement of HC. The third tier is analysis and information mining, which is fed back into the HC strategy process.

In most organisations thought leadership is based on accepted norms and assumptions, but is not rigorously validated by results. Information and execution is typically open-loop, where HC Managers learn nothing about what is working or not. Nothing is left to drive process but expediency. Instead of strategy, HC process is led by the demands of the most senior managers that make the most noise to get what they want (a particular remuneration package for top sales people; a recruitment drive to solve manufacturing delays, etc).

If the thought leadership tier does not rely on results fed back by the HC technology systems, the HC practice will not be driven by sound business reasoning and the end result will almost inevitably be bloat. Processes get more complicated, using more and more complicated (and expensive) HC technology, because it gives the feeling that work is being done.

For the HC Director to take back control and enable management of people to drive the organisation more effectively (rather than being the person other managers call when they need to fire or recruit staff), HC Directors need to get technology working for them. Right now, the bulk of HC technology systems are almost all applied at the middle: process. Simply to automate what we do.

If focus is now placed on tier three, ensuring that mechanisms are in place to measure the effectiveness of HC strategies (churn at different salary levels, job satisfaction changes with changing policies, department profitability or customer satisfaction all correlated with headcount or development in that department), then thought leadership at tier one can be based on hard information, and strategies justified in business terms. These strategies would then in turn justify processes at tier two and not allow them to be driven by the demands of a particularly obstreperous director. Therefore, avoid solutions led by those who shout the loudest and the longest, by simply what is right.

In many cases the technology to start this rebalancing of the HC decision chain is already installed in organisations; most HC technology systems already have powerful information gathering and analysis capabilities, they are just not used. Systems are architected to “e-enable” process, rather than to bring technology to bear on the whole HC decision-making chain. It is HC’s call to understand what the organisation wants from them and make it happen.

Generally, the best advice for an organisation mired in an overly expensive and under-performing HC technology enablement project, is to take a step back and firstly make an investment in time and expertise to devise the HC strategy and how it meets the organisations requirements. Think through the “people stuff” first and then only think about how to “e-enable” it. E-enabling a broken system will not fix it. E-enabling an HC strategy that feeds into policies and processes, that feed back via information analysis, gives large scale enterprise resource planning projects a fighting chance of coming in on time and within budget.

Additional remarks by Otto Pretorius in 2014

Indeed, how little has changed in 9 years. We may call it something else today, but a spade is still a spade in its purpose or lack thereof. What we have learned in recent years is that at the Strategic or Operating Model in HC (if you like), a set of thinking or design needs to happen referred to as Architecture Design. This is quite similar to the way finance is put together (i.e. rules of integration in the Finance function). Debits, Credits, Journals, Income statements, Balance sheets and so forth.

Solidifying this design for HC in line with what technology can do, has fundamentally shifted the realities of many HC Departments. In fact, this design thinking has evolved into what is refered to as a Protocol for Functional HC Architecture. This Protocol is called SIPP®– Standard Integrated People Practices. Read more about SIPP®, a technology friendly way to think about HC at www.qbit.co.za

The thinking depicted in the original interview with William Smook has also evolved tremendously and is now referred to as the Data Centric Model (DCM®). (Used to assess maturity in functions including HC). More information on this can also be found atwww.qbit.co.za

By: William Smook (2005)

Reviewed by Otto Pretorius in 2014 – How little has changed!

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